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Aditya Birla Capital has reported 15% rise in the net profit to Rs 288.68 core in the quarter ended December 2020 compared with Rs 250.48 core in the corresponding quarter last year mainly driven by improved margins, while credit cost of the company eased. The overall loan book of the company has declined, while the asset quality witnessed marginal deterioration in Q3FY2021.
The income from operation increased 16% to Rs 5025.98 core in Q3FY2021. The revenue from Life Insurance increased 37% to Rs 2824.81 crore, Asset Management 1% to Rs 321.11 crore and Health Insurance 35% to Rs 287.53 crore, while the revenue from General Insurance Broking also moved up 25% to Rs 185.32 crore, Stock & Securities Broking 24% to Rs 49.18 crore and Other Financial Services 177% to Rs 36.04 crore. However, the revenue from NBFC declined 10% to Rs 1333.23 crore and Housing Finance 2% to Rs 325.54 crore in Q3FY2021.
The PBT from Housing Finance also moved up 36% to Rs 47.83 crore, Asset Management 12% to Rs 194.10 crore and Life Insurance 7% to Rs 35.89 crore, while the PBT from General Insurance Broking increased 161% to Rs 18.48 crore and Stock & Securities Broking 64% to Rs 5.98 crore in Q3FY2021. The PBT from NBFC declined 4% to Rs 260.53 crore. Other Financial Services segment recorded PBT of Rs 8.46 crore against loss in Q3FY20, while the Health Insurance segment recorded pre-tax losses of to Rs 50.93 crore in Q3FY2021.
Performance for Q3FY2021
Overall OPM eased to 25.56% in Q3FY2021 from 33.29% in Q3FY2020, as other expenditure as a percentage of net sales moved up to 66.92% from 58.56%. The staff cost as a percentage of net sales declined to 3.81% from 4.24% in Q3FY2020. The provisions also eased to 3.70% from 3.91% in Q3FY2020.
Interest cost declined 18% to Rs 934.97 crore. PBT moved up 17% to Rs 401.09 crore in the quarter ended December 2020. The effective tax rate declined to 29.4% from 29.6%. There was profit attributable to non-controlling interest of Rs 5.68 crore in Q3FY2020. Net Profit, moved up 15% to Rs 288.68 crore in the quarter ended December 2020.
Book value of the company stood at Rs 55.3 per share, while adjusted book value (net of proforma Net Stage 3 assets and 10% of restructured loans) stood at 50.6 per share end December 2020.
Segment wise performance
Lending:
Overall lending book (NBFC and Housing Finance) stood at Rs 57522 crore
Gross disbursement in lending businesses at Rs 5097 crore, higher than pre-COVID level with 18% year on year growth and focus on retail and SME segments
Lending businesses profit before tax at Rs 308 crore, bounced back to previous year levels
Strong funding access and amongst best cost of borrowing in industry
Raised over Rs 4600 crore of long-term funds in 9MFY21
Continue to have strong focus on quality of book with increased retailisation and reduced ticket sizes across the board
NBFC business:
Gross disbursement grew 20% year on year to Rs 4282 crore in Q3FY21, out of which 55% disbursement in targeted Retail and SME targeted segments
Loan book at Rs 45650 crore vs. previous quarter at Rs 45475 crore; Retail and SME loan book grew 2% over previous quarter
Added 34 new branches during Q3FY21, primarily in semi urban locations
Net interest margin expanded by 18 bps, year on year, to 5.24%
Pre provision operating profit (% of average book) expanded 8 bps year on year to 3.65%
Profit before tax at Rs 261 crore, profitability back to pre-COVID levels
Collection efficiency at 96.4% in December 2020 at pre-COVID levels
Housing Finance business
Loan book at Rs 11872 crore with 96% retail mix; strong rebound in Gross disbursals at Rs 815 crore were higher than pre-COVID levels, growing 19% quarter on quarter and 5% year on year
Focus on granular business continues with 48% disbursement in affordable segment in Q3FY21.
Affordable book mix at 24% vs. 17% in the previous year.
Net interest margins expanded by 81 bps year on year, to 3.68%.
Collection efficiency at 96.3% in December 2020 at pre-COVID levels.
Pre provision operating profit at Rs 78 crore, grew 60% year on year.
The Net profit after tax grew 38% year on year, to Rs 38 crore.
Asset Management
The momentum in AUM growth continued with 7% year on year growth in domestic average assets under management (AAUM), to Rs 255458 crore.
Domestic average equity AUM grew by 6%, quarter on quarter, to Rs 87516 crore.
Maintained overall AAUM market share (Ex. ETF) at 9.35%.
Continued focus on building retail customer franchise with Rs 122574 crore AAUM in retail and HNIs.
Achieved highest ever quarterly profit before tax at Rs 194 crore with 12% year on year growth.
Improved profitability margin with Profit before tax/AAUM at 30 bps vis-à-vis 28 bps in previous year.
Digital transactions account for 85% of overall transactions and 75% of new folios created.
Insurance
Total gross premium of life insurance and health insurance grew 27% year on year to Rs 7441 crore in 9MFY21.
Life Insurance business
Individual First Year Premium (FYP) grew 6% year on year, to Rs 1256 crore during 9MFY21, while industry private players de-grew 6%, in the same period.
Group new business premium grew 50% year on year, to Rs 1891 crore during 9MFY21, while industry de-grew 5%, in the same period.
Consistent improvement in 13th month persistency up 200 bps, year on year, to 83.6%.
Sharp reduction in Opex to premium ratio from 17.6% in 9MFY20 to 14.0% in 9MFY21.
Net VNB margin improved 80 bps year on year during 9MFY21.
Strong focus on digital with 94% of individual business sourced digitally in 9MFY21.
Health Insurance business
Gross written premium at Rs 859 crore during 9MFY21; grew 57% over the previous year, ahead of industry growth of 26% for Standalone Health Insurers.
Retail business contributing 74% of total business.
Covering 11.2 million lives out of which over 7 million lives covered through micro and byte size products.
Business continues to build scale with focus on expenses, leading to significant improvement in combined ratio at 126% in 9MFY21, vis-à-vis 142% in 9MFY20.
Robust digital enablement with 98% digital issuance in 9MFY21 and digital renewals at 92%.
Other businesses
Profit before tax grew 2.8 times, year on year, to Rs 36 crore, from Rs 13 crore.
General Insurance broking quarterly profit before tax grew 2.6 times, year on year, to Rs 18 crore.
ARC platform AUM at Rs 2350 crore and quarterly profit before tax doubled to Rs 11.5 crore.
Stock and securities broking business profit before tax grew 64% year on year, to Rs 6 crore.
Financial Performance 9MFY2021
For the nine months ended December 2020 (9MFY2021), the consolidated net revenue of the company increased 14% to Rs 13643.54 crore. The revenue in NBFC segment declined 10% to Rs 4132.12 crore and asset management revenues declined 9% to Rs 870.25 crore. However, the revenue from life insurance moved up 36% to Rs 7134.95 crore and housing finance 1% to Rs 975.18 crore. Further, the revenues from general insurance broking increased 7% to Rs 426.64 crore, health insurance 53% to Rs 777.35 crore and stock and securities broking revenues 14% to Rs 142.87 crore in 9MFY2021 over 9MFY2020.
The interest cost declined 14% to Rs 3011.77 crore and depreciation stood at Rs 85.87 crore, PBT declined 9% to Rs 1045.30 crore in 9MFY2021. The effective tax rate declined to 30.93% in 9MFY2021 from 35.71% in 9MFY2020. Net Profit after non-controlling interest eased 3% yoy to Rs 751.40 crore in 9MFY2021.
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